My 5 year old currently sleeps on the main level, next to our bedroom. My infant currently sleeps in our bedroom, but will eventually share this room with his older brother. I will have to switch the beds, to bunk beds, because there simply isn't room for two beds in this tiny room! For now, it's the perfect size, as it's not cluttered with items.
I love his toy storage bins, they allow him to have plenty of toys, without taking up much space.
I use a Rubbermaid drawer trio to store clothing, as well as the dresser his TV sits on, which has sliding doors and shelves to store clothing.